Trainees' minimum salary
SRA Update Issue 25 – June 2012
Chair Charles Plant explains the thinking behind the SRA Board's decision to scrap the minimum salary for trainees from 1 August 2014.
The SRA is one of the few professional regulators that sets a minimum salary for trainees and the only one to set a minimum salary significantly above the statutory minimum wage.
At the board meeting on 16 May, following lengthy consideration, we decided unanimously that, from 1 August 2014, we will no longer set a minimum salary for trainees. Understandably, this has sparked much debate, most of it focusing on the impact this may have on diversity within the profession.
In reaching this decision, the board thoroughly considered the views of all stakeholders including 130 responses to the consultation, about 60 individuals who attended the focus groups, and over 1,300 individuals who responded to the online survey on this issue. We paid particular and detailed attention to the potential diversity issues.
The minimum trainee salary was introduced by the Law Society 17 years before the national minimum wage became law in 1999, to prevent exploitation and attract high-calibre entrants. However, there is little evidence that it meets these aims effectively. We needed to decide, therefore, if, setting a minimum salary effectively contributes to achieving the SRA's regulatory objectives, in particular those on equality, diversity and access to the profession.
Our comprehensive Economic and Equality Impact Assessment (EEIA) revealed a complex picture of the potential impacts of abolishing a minimum salary. We were particularly influenced by evidence which suggested that professions with alternative pathways to qualification have a more diverse workforce and, in particular, include larger numbers of those from lower socio-economic backgrounds. Indeed, looking at the career choices of those from all types of background, starting salaries appear to be a less important factor than others, such as interest in the work of the profession, eventual earnings and length of time spent studying and accumulating debt.
This, therefore, casts doubt on the value of the minimum salary in fostering diversity. Our research also suggests that removing the minimum salary may result in a greater number of training contracts. In the survey, conducted as part of the EEIA, 70 per cent of the firms that did not currently offer any training stated that they would consider doing so if the minimum salary regulation was removed. This could well provide opportunities for those from less privileged backgrounds to enter the profession which may not have otherwise been available.
Following our decision, we hope that those firms who either do not currently offer training places or offer few relative to their size will review their requirements; their future success will be inextricably tied to the recruitment of new talent. We would, in particular, wish to see the Law Society launch an initiative to encourage the profession to increase the number of training places.
The SRA's response to the consultation on the minimum salary for trainee solicitors is available at www.sra.org.uk/minimum-salary.